Thousands left high and dry as Tomi Tour travel agency goes under

One of the country’s largest travel agencies, Tomi Tour, declared bankruptcy on Friday, a development that left around 3,000 Czech tourists temporarily stranded at a number of vacation sites and thousands of others without holiday plans. Just a week earlier, Tomi Tour executive Václav Fischer had assured clients they could look forward to their holidays “without worries”. A few days later it was a different story.

Photo: CTK

On Friday Tomi Tour became the third Czech travel agency to go under this season, leaving around 3,000 clients stranded abroad and thousands of additional clients with no holiday to speak of. More than 10,000 people bought vacation packages with the firm and instead of taking off will now likely remain at home – filing insurance claims. Before its demise, Tomi Tour was one of the most popular Czech travel agencies, largely thanks to former travel magnate and company pitchman (some say part-owner) Václav Fischer.

Despite his own past business failure (he was forced to sell off his own Fischer travel agency, swamped in debt, in 2003) he still had a lot of credibility with the public. But Tomi Tour, industry insiders now say, followed a similarly “doomed” business model: one bent on increasing client numbers without paying nearly enough attention to profits. Tomio Okamura is a representative of the Association of Czech Travel Agencies:

“We saw this situation coming more than one-and-a-half years ago: the problem with Mr Fischer’s business style based on the long-term selling of very cheap tours. They simply were not realistic in terms of making a profit. In addition he didn’t pay his partners’ commissions and we had information that this year they tried to sell the agency to someone else but weren’t successful. Another warning sign was that this spring they began selling tours for the winter, and this summer for next summer. It is very clear that there was a problem with cash flow.”

Clients whose vacation plans have been dampened will at least get most or all of their money back. Tomio Okamura again:

“Clients usually receive between 80 – 95 percent but it depends on the turnover from the previous year. The insured amount is calculated from that. In Tomi Tour’s case, we think that clients will get back close to 100 percent or all of their money. But of course, we don’t know how it will be.”

Those still shopping for vacations may be worried - with three companies having folded in recent weeks – that further firms will follow. But insiders say that on the whole there is little cause for alarm. Anyone thinking, for example, that Tomi Tour’s demise was related to the economic crisis, would be mistaken; observers say it had everything to do with poor management.